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6 August 2021

Why the government’s live events reinsurance scheme is too little, too late

The programme, which offers Covid insurance to live events, comes after more than half of this summer’s festivals have already been cancelled.

By Ellen Peirson-Hagger

Since the beginning of the pandemic, the live events industry has been in crisis. The UK festival sector has been desperately in need of government support to secure its future.

The progression of the vaccine roll-out, and the subsequent easing of Covid restrictions, has not offered much solace to this struggling industry. In June 2021, a survey by the Association of Independent Festivals (AIF) reported that more than half of UK festivals with a capacity of 50,000 had been cancelled due to uncertainty around the Covid-19 crisis. Although there were no legal restrictions to festivals being held from 19 July (four weeks later than the government’s initial “roadmap” set out), organisers were wary of going ahead with their events because there was no guarantee that they would be able to secure Covid cancellation insurance

Now, the government has announced a new live events reinsurance scheme, worth over £750m. “The scheme will see the government act as a ‘reinsurer’ – stepping in with a guarantee to make sure insurers can offer the products events companies need,” reads the official statement, which also describes how the government has “partnered with Lloyd’s” to deliver the measure.

Such Covid-specific insurance is crucial because, as James Scarlett, one of the founders of 2,000 Trees and ArcTanGent festivals, told the New Statesman in May, a festival could be halfway through its weekend, with 15,000 paying ticket holders on-site, “and at that point Boris Johnson could call a press conference and say, ‘We’re locking everyone down’. In that situation, we would have to refund all of our ticket-holders. Without insurance, we’d never get that money back. There would be a very big likelihood that we would go out of business.” Scarlett, whose festivals were due to take place in July and August, decided that risk was too great, and chose to cancel his events. Other festivals including Glastonbury, Boomtown Fair, BST Hyde Park, Kendal Calling and Love Supreme were also cancelled, resulting in huge losses for organisers, and putting performers, crew, and caterers out of work for yet another season.

The announcement of the reinsurance scheme comes at the tail-end of the UK festival season, which typically starts in June. Scarlett said the news was “too little, too late”; that it has come at this point in the summer, he said, is “an insult to the whole industry”. It follows months of campaigning from the live events sector, which is worth more than £70bn annually, and supports more than 700,000 British jobs. Critics have noted that similar insurance schemes were rolled out to TV and film production more than a year ago, but only now has Chancellor Rishi Sunak addressed that the live events industries need financial support.

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The scheme will run from September 2021 until September 2022, essentially bypassing the 2021 festival season and instead looking ahead to the summer of 2022. Paul Reed, CEO of the AIF, noted that the announcement has come over a year after the organisation started campaigning for such a scheme, raising it as a headline issue with the Department for Culture Media and Sport select committee and presenting data to support the case. “We are pleased that government has listened, and welcome this intervention to address the insurance market failure,” he said. 

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But the details of the reinsurance scheme do not account for every possible eventuality. “The scheme doesn’t, however, cover a festival needing to reduce capacity or cancel due to social distancing restrictions being reintroduced,” Reed added, “so it remains imperative that government continues to work with the sector in areas such as Covid certification to try and avoid such an eventuality and ensure that organisers can plan with increased confidence for 2022.” 

In an age where tiny details – the new “safe” distance for social-distancing; the likelihood of being “pinged” by the NHS Covid-19 app – are imperative, and government safety guidelines change regularly, it is clear that this new insurance scheme is not thorough enough for the live events industry, which relies on intricate forward planning and fail-safe back-up plans. Festivals have, once again, been left behind.   

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